5 Strategies Bezos Used to Build Amazon’s Empire

Amazon's breakneck-paced growth is born out of these ideas

By Editor , Business Insider

The Gazelle Project. That’s what Amazon (AMZN) called its initiative to cajole book publishers into giving them better deals. According to The New Yorker, CEO Jeff Bezos said “that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.”

A cheetah can sprint 70 miles per hour, accelerating faster than a Ferrari Enzo. Bezos’s company moves at a similar clip. Amazon has grown at breakneck speed over the past decade and brought in nearly $75 billion last year, thanks to the unconventional, daresay ruthless style of its chief executive.

1. Be like the Godfather: Make them an offer they can’t refuse.

In 2004, Amazon set its sights on the Melville House. The boutique publisher of serious fiction and nonfiction based in Brooklyn, N.Y., was just a fledgling company when things got tense with Amazon. Co-owner Dennis Johnson recalls his distributor calling him and describing negotiations with Amazon “like dinner with the Godfather.”

As The New Yorker reports, Amazon “wanted a payment without having to reveal how many Melville House books were sold on the site.” Johnson was critical of the policy, and shared his concerns with literary trade magazine Publishers Weekly. A day after it published a story on Johnson, the “Buy” button on Melville House’s Amazon pages suddenly vanished.

2. Don’t give up information unless absolutely necessary.

Amazon didn’t tell Melville House how many of its books were sold on the site. Amazon also stays mum on Kindle sales, and won’t say how many employees it has in Seattle. Moreover, the floor where the Kindle team works at the Seattle headquarters is called Area 51, since you can’t set foot there unless you’re directly involved with the product. Bezos, it seems, likes to deliver information — and create Amazon’s narrative — in his own way, such as his carefully crafted shareholder letters.

3. Keep teams small enough that members can be fed with two pizzas.

Bezos is famous among management nerds for his Two Pizza Rule: No team should be larger than can be fed with two large pizzas. That means that task forces are limited to just five to seven people, allowing teams to test their ideas without too many onlookers, which guards against groupthink — one of Bezos’s pet peeves. Those tiny teams have led to big innovations, like the Gold Box deals, a popular promotion that gave customers limited-time deals.

4. Stop talking so much.

At an off-site retreat in the early 2000s, word was going around that groups needed to communicate more. Bezos got up and said, “No, communication is terrible!”

How could talking too much be a problem? Cross-team communication limits team independence and leads to people agreeing too much, he estimated, which stands in opposition to the creative conflict that defines Amazon’s culture.

5. Get adversarial.

“The people who do well at Amazon are often those who thrive in an adversarial atmosphere with almost constant friction,” writes Brad Stone, author of “The Everything Store,” which chronicles Amazon’s rapid growth. Why? Bezos can’t stand “social cohesion,” the cloying tendency of people who like to agree with each other and find consensus comfortable.

Research suggests that the best entrepreneurs are super disagreeable. That love of debate — where people are forced to advocate their perspectives — is ingrained in Amazon’s culture.

As Businessweek writes, one of Amazon’s 11 leadership principles is: Have Backbone; Disagree and Commit.

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.